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Portfolio Management - The elephant in the room

Is this you?

You’re stretched across too many projects.

Not only that, but you’re frustrated that there are quite a few projects in the company that seem to have little benefit, and yet they just drift on.

Worse still, these projects tie up precious time and money that you believe could be diverted to something more worthwhile.


If the above statements ring true, then your company has yet to take full control of its Portfolio Management process; the job of selecting the right projects. Most businesses are actually a bit out of control here. The good news is that it's pretty easy to sort out, the benefits are massive and it doesn't need to cost a penny.

This series of blogs is intended to:

-       Increase your knowledge of Portfolio Management as a discipline of project controls

-       Provide you with practical steps on how you can personally help your company improve

-       Expose you to an incredible career in Portfolio Management


Portfolio Management at home

We all do portfolio management at home. There are loads of projects you would like to do, but you’re constrained by the number of hours in a day and the money in your bank. Whether it’s fixing the broken window, going on holiday or building an extension, you take decisions to prioritise what gets done now, what gets put on hold and what doesn’t make the cut. It’s no big deal.


For those of you with families, this becomes slightly trickier. If you’re like me, you’ll inevitably have different priorities from your spouse and kids. You’ll need to discuss the big choices with the family, and yes, perhaps have an argument or two. At least you reach a decision.


You wouldn't do this at home

We don't act like this at home. At work, hmm that's a different story....?


Portfolio Management (not) at work

At work, there’re many more variables. Project requests come from every direction: Customers, Sales, Marketing, Operations, R&D and sometimes even the MD’s spouse. There’s also a much wider range of priorities driven by role, department, seniority, geography, personal interest, and many other factors.

If fact many companies accidentally make it harder for themselves by inventing schemes that cause priority conflicts:-

One multi-national company I know was consistently being out-performed by their competitors at developing innovative new products. Instead of focusing on the next generation product range, the Development Engineers had been assigned to lots of cost reduction projects on the existing product range. Why? The Procurement Department had personal bonuses tied to cost reduction targets and they forced through their projects. It didn’t matter to them that the sales of the existing product range were collapsing!


As you’d expect, trying to effect portfolio decisions at work given the large number of people and diversity of opinions requires a process with more rigour and visibility than the casual process we go through at home.

The processes are in principle, however, exactly the same:

1.     Agree what’s important to you

2.     Review your options

3.     Prioritise them

4.     Repeat cycle at appropriate frequency


I’ll use my following blog posts to address the day-to-day practicality of portfolio management in a business environment. We’ll cover objectives, metrics, roles, tools and anything else brought up in discussion.


Justification for change

Before we turn to the solution, we’ve got a small hurdle to clear. That is to get consensus across your company that this is something worth addressing. Why not just carry on as we are; we’re surviving aren’t we?

It would be very pursuasive to demonstrate that the projects being done today are not aligned with our company’s objectives in terms of total value, total investment and portfolio strategy. But to do that would require a fair bit of effort.

Instead, I believe it’s sufficient to demonstrate that we’re not as in control as we'd think. The usual clincher here is to show that there are far more projects going on than anyone expects, all of which are competing for the same resource.


Step 1: List your projects (30mins)

Compile a list of projects you’re working on and a few metrics on each. The metrics will depend upon the objectives of the portfolio. Assuming there are no defined portfolio metrics already, then we need to start somewhere.

I’d recommend starting with just 4 fields:

1.     Project name

2.     A single measure of benefit (eg. Net Present Value)

3.     A single measure of financial investment (Total Investment, CapEx…)

4.     Critical resource run rate in FTEs (eg. Mechanical Engineers)


We’ll be adding / changing metrics later. The point here is to keep it simple. Showing what we don’t know is just as significant as showing what we do know.

Use any method of recording you feel right. Most people are comfortable with creating a portfolio spreadsheet.

Alternatively, use a free online Portfolio Mgt tool such as The advantages of this over a spreadsheet will become apparent later when you want to start sharing, analysing and scenario planning.

Nupe screenshot


Example portfolio from nupe. It's free and you can report like this in minutes.


Step 2: Populate portfolio with colleagues’ projects (1-2 hours)

Get colleagues in your group to add their projects to your portfolio. If you’re using spreadsheets, you’ll have to do the chasing yourself. If you’re using an online tool, you can invite others to populate their own projects themselves.


Step 3: Validate data (1-4 hours)

Chart the portfolio to provide totals and project-to-project comparisons. Certainly some data will seem wrong. Chase down any data discrepancies and omissions. There's no need to spend too much time here. The ocassional omission and wayward data point tells a powerful story in itself.


If you’ve done this, fantastic! You have now started to build up a picture to describe the level of project activity. The next step is to expose reality and put-the-cat-amongst-the-pigeons! It's discuss and decision time.


I'd be delighted to engage in a discussion on portfolio management. If you have any general comments, it would be great if you could share your thoughts here on planning planet.

Alternatively, if you have a specific issue, you can contact me:

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